The next frontier in search marketing

May 27, 2009 19:24 IST

It may be hard to believe for tech types like us, but in 2008 newspaper advertising still consumed almost $35 billion of U.S. advertising spending while TV took in double that amount. If I were a CMO, would I be spending so much on avenues that are so wishy-washy, unmeasurable and downright ineffective?

Online advertising's lure has been growing as businesses see it as a more effective way to measure customer engagement. In 2008, the Internet took in $23.4 billion in ad spending. Pioneered by Google, Pay-Per-Click advertising is both measurable and efficient, and is attractive due to its pay-for-performance attribute.

But recently, paid search ad spending has been slowing down as advertisers figure out that organic search results drive a much more significant portion of their traffic. Organic search refers to search results that are not paid for by advertisers. They are a search engine's natural results, purely driven by the algorithms.

Internet tracker Hitwise claims that "the share of search traffic to Web sites generated from paid listings has dropped to about 7.25% over the last four weeks, down from 9.8% during the same period a year ago. And Hitwise noted that paid clicks from searches for brand name terms--such as Home Depot and Orbitz -- saw especially sharp drops."

Andy Beal of Marketing Pilgrim points out that these major advertisers are most likely relying more heavily on organic traffic. Thus far, however, organic search marketing via search engine optimization (SEO) has not exactly been a science. CMOs have been leery of paying fees to SEO agencies and consultants without the ability to measure what they're getting in return.

This could change with Enquisite, a new search engine marketing company. For businesses that rely heavily on online traffic, Enquisite's search marketing innovation promises to address an important gap in search marketing: driving more of the right organic search traffic.

Through its suite of products like Enquisite Campaign, Enquisite Optimizer and Enquisite Auditor, customers can maximize their traffic flow from organic search results, and agencies can be completely transparent in demonstrating the progress and value of their work. They can even charge on a pay-for-performance basis, making organic search engine marketing a viable bucket in which CMOs can now safely allocate ad dollars.

I'm not the only one who is excited about this company. Veteran entrepreneur Mark Hoffman has made Enquisite his next run. For those too young to remember, he founded the database technology pioneer Sybase, and served as its chairman, chief executive and president. He was also chairman, chief executive and president of Commerce One, which is considered to have established the software standards for electronic commerce.

Enquisite was spun off from founder Richard Zwicky's prior venture Metamend, an SEO consulting boutique. The company has raised $12 million in funding so far.

There are lots of companies like Omniture, Coremetrics, WebTrends and Marin Software in the Web analytics sector, but none of these are focused on organic search. Yet 88% of Internet search traffic flows through organic search results, making it one of its biggest untapped innovation opportunities in the domain of online marketing. SEO is mostly contracted as a professional services (flat fee) model but SEO agencies earn little compared to the value delivered.

Enquisite provides the technology to address the untapped organic side of the search market. It has the necessary technology to measure, report, demonstrate and audit the results with no lag time. Customers are assured of predictable results since the profitable business model mitigates client risk and maximizes performance. This way, both the agency and advertiser are highly motivated.

Enquisite targets large sites that depend heavily on traffic for their business. These are generally in segments like travel, insurance and online retail. Customers include sites like Viator.com, as well as agencies like Metamend, Bruce Clay, ZaaZ and Netconcepts. Enquisite leverages agencies as its main channel. Some customers, like Viator, have seen a 300% improvement in natural traffic since they began using Enquisite.

Instead of spending advertising dollars on newspaper and magazine ads, focusing on acquiring more organic search traffic as a key pillar of advertising strategy should become mainstream in the next 12 months. Thus, I see organic as the next big frontier in online advertising.

As Hoffman puts it: "If a $100 billion market-cap company [Google] can be built on the shoulders of just 12% of the world's search traffic, what kind of value creation opportunity remains locked in the other 88%?"

Indeed, it would be wonderful to see innovators tap into the organic search opportunity and create both some great companies, as well as an eco-system that would take search marketing to its next level.

Sramana Mitra is a technology entrepreneur and strategy consultant in Silicon Valley. She has founded three companies and writes a business blog, Sramana Mitra on Strategy.